Netiquette literally means Internet etiquette and can be defined as proper public behavior while on the Internet. In the real world, it is considered unseemly (at best) to hit somebody or shout obscenities in public. Similarly, the Internet also has standards for behavior.
The idea behind any etiquette is to keep the peace. Being rude to somebody is generally a good way to start a fight, while being polite can generally prevent that.
As for the specifics:
1) No flaming!
Flaming means insulting or verbally abusing somebody on-line. It can lead to a flame war, an ugly, knock-down fight between two or more people on the Net. Some chatrooms and messageboards are notorious for their frequent flame wars.
Flames can be relatively mild, i.e. Youre stupid! or extremely cruel. Insults pertaining to ones race, ethnicity, or religion fall into the latter category.
The bottom line is that if you wouldnt say it to someones face, you probably shouldnt say it on the Net.
2) DONT TYPE IN ALL CAPS, like I just did. Its hard to read, and is the Net version of shouting. It also annoys people.
3) When visiting a new site, check the FAQ (Frequently Asked Questions) section. Youll only annoy the regulars if you ask questions that the FAQ has already answered.
4) When visiting a discussion board or chat room devoted devoted to a specific topic, stick to that topic, at least at first. A Star Trek chat room is probably not the place to talk about Buffy the Vampire Slayer. On the other hand, if the regulars have gone off-topic themselves, then its okay to do the same.
5) Respect the webmasters rules if s/he has any. Visiting a website is basically visiting somebodys home in cyberspace. Many webmasters put considerable time and effort into their sites, and should be treated with due respect.
6) If you establish a website of your own, show a modicum of good taste and dont put up anything offensive or vulgar. Remember, people from all over the world might find and visit your site. Basically, if you wouldnt want your 10-year old nephew looking at it, you probably shouldnt put it on the site.
7) If you do have something of questionable taste on your site, like a pornographic story, label it as such. Give visitors some sort of warning, so they can avoid it if they want to.
8) Have fun. Surfing the Net is supposed to be fun.